Correlation Between Lonkey Industrial and China Railway
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By analyzing existing cross correlation between Lonkey Industrial Co and China Railway Construction, you can compare the effects of market volatilities on Lonkey Industrial and China Railway and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lonkey Industrial with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lonkey Industrial and China Railway.
Diversification Opportunities for Lonkey Industrial and China Railway
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lonkey and China is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Lonkey Industrial Co and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr and Lonkey Industrial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lonkey Industrial Co are associated (or correlated) with China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Constr has no effect on the direction of Lonkey Industrial i.e., Lonkey Industrial and China Railway go up and down completely randomly.
Pair Corralation between Lonkey Industrial and China Railway
Assuming the 90 days trading horizon Lonkey Industrial is expected to generate 1.81 times less return on investment than China Railway. In addition to that, Lonkey Industrial is 1.29 times more volatile than China Railway Construction. It trades about 0.01 of its total potential returns per unit of risk. China Railway Construction is currently generating about 0.03 per unit of volatility. If you would invest 406.00 in China Railway Construction on September 26, 2024 and sell it today you would earn a total of 55.00 from holding China Railway Construction or generate 13.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Lonkey Industrial Co vs. China Railway Construction
Performance |
Timeline |
Lonkey Industrial |
China Railway Constr |
Lonkey Industrial and China Railway Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lonkey Industrial and China Railway
The main advantage of trading using opposite Lonkey Industrial and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lonkey Industrial position performs unexpectedly, China Railway can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in China Railway will offset losses from the drop in China Railway's long position.Lonkey Industrial vs. BYD Co Ltd | Lonkey Industrial vs. China Mobile Limited | Lonkey Industrial vs. Agricultural Bank of | Lonkey Industrial vs. Industrial and Commercial |
China Railway vs. Lonkey Industrial Co | China Railway vs. Maxvision Technology Corp | China Railway vs. INKON Life Technology | China Railway vs. Jiangxi Selon Industrial |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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